What would happen if people just refused to buy health insurance even if a law ordered them to?

How to fix health policy.
March 11 2010 6:54 PM

Health Reform and "Massive Resistance"

What would happen if people just refused to buy health insurance even if a law ordered them to?

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Timothy S. Jost.
Law professor Timothy S. Jost

The state of Virginia has a nutty new law prohibiting the federal government from compelling anyone in the commonwealth to purchase health insurance. Thirty-four other states are weighing similar laws nullifying health care reform's "individual mandate." Timothy S. Jost, a law professor at Washington and Lee who favors passage of the bill, argues reassuringly in this essay on the New England Journal of Medicine's Web site that such challenges have no legal standing whatsoever. "We fought a war about that," Jost reminded me, "and the states lost." Jost is similarly reassuring about the constitutionality of the individual mandate itself. Like most legal scholars, he finds the argument in its favor "overwhelming" (though he concedes "it is hard to think of a direct precedent"). But Jost admits to some uncertainty about how easy it will be to enforce the individual mandate, citing two disquieting antecedents. The first is the "massive resistance" at the state level against 1954's Supreme Court school-desegregation decision (spearheaded, coincidentally, by a senator from Virginia). The second is California's defiance of 2005's Supreme Court ruling against the use of marijuana for medical purposes.

As currently devised, the individual mandate, which would be phased in between 2014 and 2016, would impose a tax penalty on people who fail to acquire health insurance. Under the Obama proposal, it would be 2.5 percent of income or $695 (whichever is higher), with exemptions for people who either fall under the tax-filing threshold or who, if forced to purchase health insurance, would end up spending more than 8 percent of their annual income. The majority of those subject to the mandate would receive a government subsidy whose precise size is being worked out in House-Senate negotiations.

The answer, then, to the question What happens to people who don't buy health insurance? is simple: They have to pay a $695 fine. But as Jost points out, that begs the question, What happens to people who don't pay the fine? Uh … nothing. Please turn to Page 336 of the Senate bill, whose language has been adopted in the Obama proposal:

In the case of any failure by a taxpayer to timely pay any penalty imposed by this section, such taxpayer shall not be subject to any criminal prosecution or penalty with respect to such failure.

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On that same page, it says the Health and Human Services secretary shall not

file notice of lien with respect to any property of a taxpayer by reason of any failure to pay the penalty … or levy on any such property with respect to such failure.

Huh. "Compliance," Jost concludes,

will therefore be largely voluntary (although the IRS can still make a tax resister'slife miserable, whether or not it can ultimately collect). Thestate [nullification] bills can thus be seen as invitations to civil disobediencethat counsel state citizens to "violate the federal law, wavethis statute in their face, and dare them to come after you."

When the late Virginia Sen. Harry Byrd declared war on Brown v. Board of Ed., the result was a few years of defiance at the state level, a lot of newspaper columns and public statements that James J. Kilpatrick came to regret, and eventual capitulation. When the state of California maintained its medical marijuana program in defiance of federal law, the result was a lot of busts by the feds followed by a decision by Attorney General Eric Holder that he had better things to do than prosecute a lot of dopers with medical conditions.

In both those instances, defiance led to legal battles and sometimes to prison sentences. Defying the individual mandate will probably lead to some court battles, too, but once the constitutional issues are settled (probably in the individual mandate's favor), there won't be much left to fight about. And apparently there won't be any threat of prison time or financial penalty. There will only be the threat of pissing off the IRS—and Republicans in Congress may be hyper-vigilant about policing any audits perceived to be retribution for noncompliance.

On the other hand, health insurance is in many ways quite different from school integration and medical marijuana. To white segregationists, letting blacks into white schools was an intolerable reordering of society. To consumers of medical marijuana, giving this form of therapy up would be forgoing medication that eases the symptoms of disease. One was a dose of unpleasant medicine; the other a dose of, well, pleasant medicine. Health insurance is something altogether different. Almost nobody actively opposes the idea of being insured. Resistance to the individual mandate isn't about health insurance per se; it's about being told how to spend your money. And most of us got used to the idea long ago that the government needs to help itself to some of that money in order to make the society work.

Another matter to consider is that in Massachusetts, the one state where an individual mandate has actually been tried, people aren't marching in the streets against it. "We have not seen a popular backlash," Jon Kingsdale, executive director of the Massachusetts Connector (the prototype for Obamacare's state exchanges), assured me by e-mail. "Only several thousand taxpayers followed through with a formal appeal of their tax penalty for 2007 or again for 2008. (The 2009 tax filings are still largely ahead of us.) A handful of appellants have tried to take this sort of case to court, but all have been … dismissed without the full case being argued before the court."

In Massachusetts, the individual mandate has reduced the state's uninsured to  2.7 percent. Some of those folks are paying the fine, some are exempt based on income, and presumably some are neither paying the fine nor exempt; I couldn't tell you how many. With the Bay state's uninsured below 3 percent, it doesn't seem a particularly urgent question. If it rises above 5 percent, I'll get back to you.

E-mail Timothy Noah at chatterbox@slate.com.

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Timothy Noah is a former Slate staffer. His  book about income inequality is The Great Divergence.